If your business does not accept payment by credit card, it does not accept the preferred payment method of most consumers. For a merchant that sells consumer goods and services, payment options and sales are inextricably linked. Without the right account services, its sales can remain stagnant, stunting its growth. Most businesses require the service of a credit card merchant account service (a.k.a. MSP) to succeed financially. These businesses should know how an MSP operates before signing a contract. The answers below speak to critical aspects of MSP operation.
How does an MSP Operate?
An MSP is an organization that has a bankcard relationship with a bank that sponsored it to a credit card company. If a credit card company accepts an MSP as one of its credit account providers, the bank that sponsored it becomes its “acquiring bank”—a bank that acquires and processes the transactions that are made by the MSP’s customers.
Contrary to popular perception, MSPs are not financial institutions. Rather, they provide payment accounts that are supported by financial institutions.
What types of fees come with a merchant account?
Fees vary by MSP and account type. Five fees that apply to most accounts are: transaction fees, monthly minimum fees, statement fees, gateway fees and discount rates.
A transaction fee is assessed when payment authorization is requested. A monthly minimum fee is assessed when a merchant does not accrue enough transaction fees to satisfy the minimum amount required. A statement fee is assessed upon the preparation of a merchant’s monthly account statement. A gateway fee is assessed monthly for the use of payment gateway. A discount rate is a combination of fees, dues and charges paid for the use of a credit account, and are withheld from each sales transaction.
What is different about a small business merchant account?
The difference between a small business merchant account and a regular one is the latter accommodates small businesses by having fewer or reduced account fees. Depending on the MSP, additional incentives may exist as well.
How much could a credit payment account increase a business’ revenue?
There are several statistics that demonstrate the potential impact of a credit account on a business’ revenue. For one, research shows that accepting credit payment online can increase revenue by over 70%. Research also shows that the average cash purchase is nine dollars, compared to forty dollars for the average credit purchase. A credit cad merchant account service supplies businesses with options for accepting credit payment in store, out of store, over the telephone, through the mail and over the Internet.
Can credit processing equipment be leased?
Yes, although some MSPs only offer it for purchase. If you need a card processing terminal for the foreseeable future, buying could be more cost effective than leasing.
How is AVPS different from other MSPs?
AVPS is distinguished by over twenty-five years of service to small and large merchants. We also offer the best service options at the lowest prices. Whereas some MSPs are simply “in it for the money,” AVPS has a long history of caring about its customers’ success, regardless of their size or service options.